How Biopharma BD&L Teams are Enhancing Decision Support Capabilities

Pete Vaccaro

Amy Heath

Biopharma business development and licensing (BD&L) executives operate in a unique arena, enjoying a privileged view of future pipeline plans while shouldering the weight of high-stakes, high-visibility decisions. These leaders contend with compressed timelines, constant C-suite scrutiny, and the knowledge that even small misperceptions can compound into decisions with far-reaching implications — sometimes affecting the stock prices of both the buyer and the seller.

Despite the inherent challenges, BD&L executives are often energized by the importance of their roles, buoyed in part by their pride in knowing only a small number of biopharma executives will ever claim the experience. Navigating the complexities of the job is like walking a tightrope woven of endless facts and opinions without a safety net. To excel in this high-pressure environment, you better love a good adrenaline rush.

To gain a competitive advantage, BD&L teams are pursuing innovative solutions designed to mitigate risk, improve the quality of insights, and enhance their predictive powers. A standout approach combines proprietary research led by former payer executives with the perspectives of current payer decision-makers, and the payoff is often calculated in billions.

The case for better insights

Here is just one example, which must remain partially blinded. An overseas biotech startup was developing a drug with a novel mechanism of action to treat a specific population of patients with diabetes. Armed with strong early indicators of this treatment’s phase II efficacy and safety, the executive team sought to explore a licensing opportunity with an established biopharma manufacturer which had previously conveyed interest.

The larger manufacturer’s seasoned BD&L team, supported by extensive resources, systematically conducted asset evaluations with increasing rigor as its C-suite’s level of interest heightened. In this case, leadership engagement was increasing rapidly; the portfolio fit, unmet need, and total addressable market were all clear and undeniably attractive. However, the matter of the therapy’s US pricing was in dispute, but not in the way most might anticipate.

The biotech’s pitch proudly stated their therapy could be priced at $100K per treatment, citing thoughtful analytics from desk research to support that claim. The larger manufacturer, on the other hand, felt the price ceiling approached $250K. This poses the question, “Why the difference?”

Unlike the biotech startup, the more experienced team had former payer executives conduct primary market research with a panel of active US payers, and the insights enabled a deeper understanding of the true alternatives available to PBMs and health plans. While payers clearly opposed pricing above $100K, they were unlikely to reject prescriptions from specialists given the seriousness of the disease and the known limitations of the current standard of care. Ultimately, a critical information imbalance was leveraged in the ensuing negotiations, and unbeknownst to the startup, the financial opportunity was summarily reduced by more than half.

Scenarios like the one above are much more common than many might expect. This example illustrates how BD&L teams can transform decision-making by leveraging real-world payer insights to maximize their strategic positioning. Bridging critical knowledge gaps is important, but the potential to identify differences in valuation inputs which can then be leveraged in negotiations is the ultimate reward. This is oftentimes the difference between success and failure.

Unlocking competitive advantages

For BD&L teams to elevate their drug evaluation processes, a clear roadmap exists. By leveraging the expertise of former payers, updating research protocols that exclude outdated perspectives, and securing adaptable market research contracts, teams can further enhance their forecasting abilities and make better-informed decisions. Beyond mitigating risk, these practices unlock competitive advantages essential for building an industry-leading BD&L function — one that not only drives strategic growth but also shapes the future of biopharma innovation.

Pete Vaccaro has 27 years of biopharma experience and is located in Boston, MA. Amy Heath has 26 years of biopharma experience and is located in Indianapolis, IN.